ONGC mum on outbidding Vedanta for Cairn stake
26 Aug 2010
1
State-owned Oil & Natural Gas Commission, the country's biggest oil explorer, said today it is examining the legal and contractual implications of the Cairn-Energy Vedanta deal, but refused to say if it would make a counter-offer.
''We are examining legal and contractual implications of the Cairn-Vedanta deal on us,'' ONGC chairman and managing director R S Sharma told reporters here. ONGC is a 30 per cent partner of Cairn India, an arm of Scotland-based Cairn Energy Plc, in the Rajasthan oilfields, which is at the centre of a $9.6 billion takeover deal by the London-listed Vedanta Resources.
''In the board meeting today, I apprised the board members of the status ever since the Cairn-Vedanta deal was made public. We are tracking the developments closely. There are certain strategic issues for any corporate entity which I cannot share,'' Sharma said.
Vedanta has entered into a deal to acquire a 60 per cent stake in Cairn India, the main owner of India's largest oilfield, for $9.6 billion. It will mark NRI billionaire Anil Aggarwal-owned Vedanta's entry in the oil business, but the government has said the deal is contingent on its approval.
When asked whether the ONGC would make a counter offer, Sharma said, ''I would not like to comment.''
It has been widely reported that the petroleum and natural gas ministry, headed by veteran Mumbai politician Murli Deora, was till early this week nudging ONGC to cobble up an alliance with Oil India Ltd and gas supplier GAIL for a rival bid; but a cross-section of opinion says the ministry has no legal or moral right to interfere in the Cairn-Vedanta deal. It is only trying to intervene because of its old penchant for sticking its fingers into any major commercial pie.
Corporate affairs Minister Salman Khurshid admitted as much when he told reporters on Wednesday that ''If shareholders approve, we have nothing to do ... if shareholders have a problem, they can go to the High Court, CLB or us. We should not be sitting here and prying on people.''
Shareholders, however, could yet prove a stumbling block for the deal. While it almost clear that the oil PSUs will not be making a counter offer, a minority shareholder of Sesa Goa has moved the Supreme Court against the mandatory 20 per cent open offer for Cairn's shares.
Speaking to CNBC-TV18, the shareholder's counsel Mahesh Agrawal said, "Harinarayan Bajaj, a shareholder of Sesa Goa, has moved an application in the Supreme Court for a stay of public offer made by Vedanta to Cairn Energy because the acquisition of shares by Vedanta in Sesa Goa is sub judice in the Supreme Court. Therefore, reserves of Sesa Goa cannot be used for acquisition of Cairn Energy's shares."
''We are examining legal and contractual implications of the Cairn-Vedanta deal on us,'' ONGC chairman and managing director R S Sharma told reporters here. ONGC is a 30 per cent partner of Cairn India, an arm of Scotland-based Cairn Energy Plc, in the Rajasthan oilfields, which is at the centre of a $9.6 billion takeover deal by the London-listed Vedanta Resources.
''In the board meeting today, I apprised the board members of the status ever since the Cairn-Vedanta deal was made public. We are tracking the developments closely. There are certain strategic issues for any corporate entity which I cannot share,'' Sharma said.
Vedanta has entered into a deal to acquire a 60 per cent stake in Cairn India, the main owner of India's largest oilfield, for $9.6 billion. It will mark NRI billionaire Anil Aggarwal-owned Vedanta's entry in the oil business, but the government has said the deal is contingent on its approval.
When asked whether the ONGC would make a counter offer, Sharma said, ''I would not like to comment.''
It has been widely reported that the petroleum and natural gas ministry, headed by veteran Mumbai politician Murli Deora, was till early this week nudging ONGC to cobble up an alliance with Oil India Ltd and gas supplier GAIL for a rival bid; but a cross-section of opinion says the ministry has no legal or moral right to interfere in the Cairn-Vedanta deal. It is only trying to intervene because of its old penchant for sticking its fingers into any major commercial pie.
Corporate affairs Minister Salman Khurshid admitted as much when he told reporters on Wednesday that ''If shareholders approve, we have nothing to do ... if shareholders have a problem, they can go to the High Court, CLB or us. We should not be sitting here and prying on people.''
Shareholders, however, could yet prove a stumbling block for the deal. While it almost clear that the oil PSUs will not be making a counter offer, a minority shareholder of Sesa Goa has moved the Supreme Court against the mandatory 20 per cent open offer for Cairn's shares.
Speaking to CNBC-TV18, the shareholder's counsel Mahesh Agrawal said, "Harinarayan Bajaj, a shareholder of Sesa Goa, has moved an application in the Supreme Court for a stay of public offer made by Vedanta to Cairn Energy because the acquisition of shares by Vedanta in Sesa Goa is sub judice in the Supreme Court. Therefore, reserves of Sesa Goa cannot be used for acquisition of Cairn Energy's shares."
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